Fintech start-up to save South Africans from growing credit-trap


Derek Cikes | Commercial Director | Payflex | mail me

South African fin-tech start-up, Payflex, is on the warpath with South Africa’s debt crisis. We intend to save online consumers from themselves by encouraging them to spend responsibly while offering online shoppers an interest-free payment solution. Our arrival to market is well-timed.

According to a recent report by Global Web Index, COVID-19 has created a boom in eCommerce.

Flexibility in payment options

Across 17 countries, almost 1 in every 2 consumers is looking to online marketplaces for their shopping needs. In addition, this report states that 83% of consumers think brands should be providing flexibility in payment options to help alleviate the financial stress caused by the outbreak.

Even before the coronavirus reared its head, economists were warning that 2020 was going to be a tough year and that consumers who had difficulty making ends meet in 2019 are going to find it much harder in the new year.

Almost half of all SA consumers are three months or more behind in their payments. The major culprits are credit and store cards, followed closely by unsecured debt.

40% of the 25 million credit-active people in South Africa are not using that credit responsibly with South African household debt reaching an eye-watering 72.7% according to SARB’s 2019 Q3 bulletin.

Credit pitfalls

Old Mutual’s Millennial Report also shows that while millennials are more inclined to invest their money for financial freedom compared to past generations, 35% are doing so in order to pay back debt.

Paradoxically, while millennials, in particular, are terrified of falling into credit pitfalls, they also seem to be the generation who check out with a digital cart load full of emotional purchases.

The silver lining is that millennials and their younger counterparts Generation Z are open to innovative, disruptive solutions that challenge the archaic systems of ‘borrow money now and pay 150% more for it later’.

It’s simply unfair and it doesn’t have to be this way, there is a way that everyone can still win commercially without driving South African consumers into harrowing debt.

In a Robin hood-like effort, we take a small fee from the online merchant to save the consumer from debt. A shopper purchases goods online and pays only 25% for it immediately. The shopper then pays back the outstanding amount in 3 more instalments interest-free and zero fees.

Financial and fraud risks

We pay the full price of the shopper’s bought goods directly to the merchant and takes on all financial and fraud risks in exchange for a small commission.

The merchant wins because this decreases their cart-abandon rates by 30% and increases order values by up to 70%; the shopper wins because they get to scratch that instant gratification itch without the heavy burden of owing on their credit cards. It’s also easy to sign up and provides a frictionless easy experience.

Behemoth retailer, is the latest online e-commerce marketplace to integrate Payflex with its checkout point, providing its millions of customers with a way to shop responsibly.

We are certain that South Africans will welcome our solution based on the international uptake of similar products.

In conclusion

Our partners, Zip payments in New Zealand, have hundreds of thousands of users so we’re confident that South Africa will follow and save themselves from unnecessary debt.

We just want South Africans to know that there is a better way to shop. It doesn’t have to throw you into unwanted debt and you can buy what you want now…safely.

– Paul Behrmann, CEO and co-founder, Payflex 

We have over 160 South African online merchants within its partner portal and thousands of South African shoppers currently using their service. We also recently became one of the select payment options for the Solidarity Fund.

We’re hoping that by providing a donate now, pay in 4 solution, it will encourage South Africans to give larger donations and help those who really need it.



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